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The bubble

The Washington Post is out with part one of its retrospective on the nationwide housing bubble.

And here’s a critique of the story from Dean Baker, co-director of the Center for Economic and Policy Research, in Washington, D.C., and an early caller of the housing bubble.

“First and foremost, the article attributes the bubble to the proliferation of subprime and exotic loan instruments,” Baker writes. “In fact, the bubble preceded the surge in subprime and the development of exotic financial instruments in the housing sector. House prices had begun to diverge from their long-term trend in the mid-90s, spurred by the run-up of wealth created by the stock bubble.”

Note: This is a seattlepi.com reader blog. It is not written or edited by the P-I. The authors are solely responsible for content. E-mail us at newmedia@seattlepi.com if you consider a post inappropriate..